Upside Targets for EUR/JPY

For EUR/JPY, a key target is the all-time high of 177.94 from October 9. If this level is surpassed, we could see the price approach the upper boundary of the ascending channel near 181.70. Support levels include 176.00, followed by the nine-day EMA at 175.86 and the lower boundary of the channel around 175.50. If the price drops below these levels, it may weaken short-term momentum and test near the 50-day EMA at 173.99. A further decline could challenge the six-week low of 172.14 set on September 9. The Euro has shown weaknesses against major currencies, particularly the Australian Dollar. The heatmap below shows percentage changes among major currencies. Please note that investment risks and strategies are personal and not advised by FXStreet. The author has no business relationships or stock positions mentioned in this article.

Potential Investment Strategies

EUR/JPY is in a clear bullish trend, currently holding above the 176.00 level. The price remains above the nine-day Exponential Moving Average, and the RSI reading supports this positive momentum, indicating that buyers are in control. This strength is primarily driven by the gap in monetary policy between the European Central Bank (ECB) and the Bank of Japan (BoJ). With Eurozone core inflation steady around 2.5% last month, the ECB is expected to maintain elevated rates. Meanwhile, the BoJ has been cautious about further rate increases, keeping its policy rate at only 0.1%. Given this outlook, we should consider strategies to benefit from a potential upward move. Buying call options with strike prices aimed at the recent all-time high of 177.94 could be a good strategy. If the pair breaks this level, the next significant target is near 181.70, offering substantial potential. However, it’s essential to monitor the 176.00 psychological support level closely. If the price drops below 175.50, this may indicate a loss of momentum and be a signal to hedge long positions. Buying put options with a strike near 175.00 would provide protection against a sharp decline toward the 50-day EMA. Looking more broadly, current low market volatility, with the VIX index around 14, makes carry trades appealing. This strategy involves borrowing low-yielding yen to invest in the higher-yielding euro, giving additional support to the pair. We are navigating uncharted territory by surpassing highs last seen in 2008, making psychological levels very important. Create your live VT Markets account and start trading now.

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